Tài liệu The importances and impacts of corporate social responsibility activities of hanoi construction & investment company (hacinco)

THE IMPORTANCES AND IMPACTS OF CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES OF HANOI CONSTRUCTION & INVESTMENT COMPANY (HACINCO) BY TRUONG VU HOA BINH E0600053 Supervisor: Dr. Le Van Lien Graduation Project Submitted to the Department of Business Studies, HELP University College, in Partial Fulfillment of the Requirements for the Degree of Bachelor of Business (Accounting) Hons June 2010 1 Declaration of Originality and Word Count _________________________________________________________________ DECLARATION I declare that this graduation project is based on my original work except for quotations and citation which have been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other courses/degrees at HELP University College or other institutions. Word Count: 10,015 words. ____________________ Truong Vu Hoa Binh 2 October, 2010 LIST OF ABBREVIATIONS CSR Corporate Social Responsibility Hacinco Hanoi construction and investment company HSV Hacinco Student Village TBL Triple Bottom Line 3 TABLE OF CONTENTS 1. INTRODUCTION ............................................................................................... 5 1.1. CSR in the world .......................................................................................... 5 1.2. CSR in Vietnam............................................................................................ 6 1.3. CSR in Hacinco ............................................................................................ 6 1.4. Problem statement ...................................................................................... 11 1.5. Objective of research .................................................................................. 11 1.6. Sphere of research ...................................................................................... 11 1.7. Research methods ....................................................................................... 11 1.8. Structure of the research ............................................................................. 12 2. LITERATURE REVIEW .................................................................................. 13 2.1. The evolution of the CSR concepts ............................................................ 13 2.2. CSR elements ............................................................................................. 15 2.3 Benefits of CSR ........................................................................................... 17 2.4. Ethics and social responsibility in business ............................................... 21 2.5. CSR reporting ............................................................................................. 28 3. RESEARCH METHODOLOGY ...................................................................... 29 3.1. Research Objective ..................................................................................... 29 3.2. Research Methodology ............................................................................... 29 3.3. Data source ................................................................................................. 29 3.4. Research method ........................................................................................ 30 3.5. Research tool .............................................................................................. 30 3.5.1. Questionnaire....................................................................................... 30 3.5.2. Personal interview ............................................................................... 31 3.5.3. Data collection ..................................................................................... 31 3.6. Sampling ..................................................................................................... 31 3.6.1. Sampling population............................................................................ 31 3.6.2. Sample frame ....................................................................................... 31 3.6.3. Sample size .......................................................................................... 31 3.6.4. Sample techniques ............................................................................... 31 3.7. Limitation ................................................................................................... 32 4. FINDING AND ANALYSIS ............................................................................ 33 4.1. Management and staffs ............................................................................... 33 4.1.1. Findings from the questionnaire question ........................................... 33 4.1.2. Findings from the CSR disclosures and reports .................................. 35 4.1.3. Findings from the management interviews ......................................... 36 4.1.4. Overall result from management and staffs‟ responses ....................... 37 4.2. Customer .................................................................................................... 38 4.2.1. Finding from the questionnaire survey ................................................ 38 4.2.2. Overall results from customers‟ responses .......................................... 39 4.3. CSR activities benefit receivers ................................................................. 40 4.3.1. Finding from the questionnaire survey ................................................ 40 4.3.2. Finding from the interview group ....................................................... 40 4.3.3 Overall results from Hacinco social responsibility benefit receivers‟ responses ....................................................................................................... 42 5. CONCLUSION ................................................................................................. 43 4 REFERENCE: ....................................................................................................... 45 1. INTRODUCTION 1.1. CSR in the world Recently, the social publics have put their interest and raise their concern to numerous violations of business ethics, environment and harm human health at serious level. Specifically, in 2008, people in the world were totally shock by the “putting” contaminated items into the milk products by the Chinese companies, which caused death to 6 babies, ill and poisonous condition to many people, the pains suffered by the victims‟ families and the psychological panic to the unsecured, substandard and unhygienic foods by the social communities. In 2009, Vedan Vietnam was found guilty as they pumped directly the untreated and poisonous waste into the Thi Vai River for years, which damaged the living and working environment of the agriculture workers and the households living around. In 2010, BP was found irresponsible as its spit oil into the Gulf, which caused death to a lot of sea creatures and damaged the sea environment. Now, people in the world care more and more about the responsibility of the companies: how they do the business, what are the impacts on the environments and how they solve it, what did they do to contribute to the society. Corporate Social Responsibility – CSR is not a strange term for the developed countries in the world. There is a club named “One percent” in the US which is a group of business entities willing to contribute one percent of their annual profit to the social activities funds. In France, France Télécom, RATP are examples of the companies raising funds for the French modern arts. 5 1.2. CSR in Vietnam Vietnam is just a developing country, most of the business enterprises are medium size and small size, CSR seem to be a new term then the application and practice of CSR is not in focus. However, there are some specific companies has put CSR into their business strategy such as Vinamilk and Dutch Lady launching social program of “6 million cups of milk for poor children throughout Vietnam“ and “Den dom dom Scholarship” 1.3. CSR in Hacinco In this paper, we are looking at Hanoi construction and investment company – Hacinco another example of one of the companies consider the importance and doing the CSR. Initially, the company was name as Hanoi Urban Development and Investment, and then it merged to the Hanoi Construction No2. Hacinco was established and officially went into operation and doing business since January 1994. The 5 main activities of the company were bidding, doing construction contracts and Project Investment, testing construction material, trading construction material, leasing construction equipment and trading and providing services. With its resources, Hacinco still keeps diversifying its products and type of business, focusing on the new projects and new urban centers construction investment, managing and organizing the residential house and buidings. Hacinco also expand its joint venture relationships with many domestic and foreign entities to acquire advanced construction technology invests its building capacity and applies research of technologies for the manufacturing of advanced building 6 materials. Bidding and doing construction contract is one of its key strength so far and the company still has it efficiently operated. For years, Hacinco has been successful in gaining construction bids of key project in Hanoi such as project of Dong Xuan Market - Bac Qua, Hacinco hotel, Binh Minh 1 hotel in Hanoi, Nam Trung Yen new urban area, Me Tri Ha new urban area, renovate the offices of the National Assembly at 35 Ngo Quyen street… Seeing the development trend of eco-tourism, sustainable tourism, humanities, Hacinco is also implementing projects such as the Kinh Bac cultural tourism at Dam temple, Tu Son, Bac Ninh with area of 70 ha to contribute to preserving and promoting cultural values. The company built two blocks B3 and B4 in Cau Dien, Hanoi create residential housing for low-income people having difficulties in finding houses. The old dormitory has been a potential threat to the people living around and also make the bad images. The dormitory of old, fell saggy potential threat to people living here and also sleazy, take the urban landscape. Hacinco project to renovate dormitory Literature target variable neighborhood deteriorated badly for this area become an urban modern civilization. Do not bound feet in Hanoi, Hacinco also involved in building many of the other local hospitals in Dien Bien, traffic control centers in the city of Thai Nguyen, Binh Minh 2 Hotel in Ha Long… The dynamics of a flat world Hacinco helped reach more Phonni building market in Vientiane, Laos and building high-rise housing project in Sofia, Bulgaria. The company also expanded its business into the field office for rent, 7 houses, business hotels, restaurants and other tourist services, passenger transport… Hacinco goal of perfecting and developing all areas of their operations to take the company into a multi-business company reputation in the market. Tireless efforts have helped Hacinco success and the 4th consecutive award quality brand reputation and strong brand award in Vietnam. Hacinco ranked as one of 10 leading enterprises in the construction field and are among 300 leading enterprises in Vietnam. Product of student housing Hacinco award Gold Cup prodtucts and services in 2008 for best 149 enterprises, entrepreneurs had occurred on 01/03/2009 at the Opera House, Hanoi, the 6th consecutive award brand reputation and quality awards Brand Vietnam, Brand Award and the Top 50 Sustainable Green Cup Vietnam Trademark The award by the Association of Small and Medium Enterprises in Vietnam, magazines and business integration and East Asian media companies jointly held to recognize the contributions of businesses, entrepreneurs have products, optimization services, contributing to change the face of the country‟s economy. However, what makes leaders Hacinco is proud of owning a team of highly qualified professional, including over 500 skilled workers and 30 key officials over 200 technical staff are university undergraduate and graduate education in the fields of economics, architecture and construction. “People are the source of extremely valuable assets of the company so we are constantly training and developing human resources by providing staff to study foreign experience and invite foreign experts for guidance, exchange experiences, “said a leader Hacinco. 8 Besides high quality human resources, Hacinco also actively investing in a system of construction machinery of modern advances to the most current Vietnam, especially to meet the construction of tall buildings such as commercial concrete batching plants, concrete trucks, concrete pump car capable of reaching 44 m high, tower cranes, cage hoists, raised floor, self-propelled cranes and other construction materials laboratory to help build modern Hacinco qualified investment execution and construction of projects in Group A, B, C. With solid experience in the construction and development, today Hacinco is indeed a powerful company in the members of the Corporation for Investment and Development of Hanoi, is on the rise a collective position powerful economic groups in the country. CSR activities of the Hacinco included providing low-price tourism services for invalids and their families, providing low-price but high quality housing for students – Student Village, organizing sports events, cultural and artistic exchange events for the staffs and the students, raising fund for scholarship to poor students, … There is a shortage of housing for colleges and universities students in Hanoi for years. The number of the colleges and universities in Hanoi having their own dormitories for students to live in is limited and the rooms supply rarely meets the students living demand. Most of the school dormitories are old and last at least 15 years; some of them are one-floor apartments. The quality of the rooms and the services provided are rather poor; utility supply systems work inefficiently led to the shortage of water and electric for living. 9 Most of the dormitories in Hanoi are built and owned by the colleges and universities under the guidelines and control of the Education Ministry. Since the returns in this kind of investment are rather low and it takes a long time to recover the initial outflows, so no private units get interested in these investments. So far, there have only been 2 private dormitory projects in Hanoi; one is Hacinco Students Village invested by Hacinco and the other is Thang Long dormitory invested by Thang Long Company. However, according to recent research, over half of the rooms which initially open for students to live in now have been sold to the households and private individuals. Hacinco Students Village is a social-economic project first established in 2000 and aimed to create housing for students who study at the colleges and universities in Hanoi. This is a joint building with 7 main 7-to-21-floors blocks, in which consists of comfortable apartments with Internet cable, Television cable, modern water, light and electric supply systems. In addition, HSV also has internal roads and green trees areas and provide security services, vehicle parking and keeping services, etc. Hacinco also hold an annual Village Festival in October to create a chance for employees working at Hacinco, for students living at Hacinco to exchange culture, arts, and sports events. In theses occasions, Hacinco arrange low cost tours for Vietnamese War Veterans to visit some special spots in Hanoi. The company partially or fully pays the transports fees, arrange the living place, and serve meals for all the tourist members. Then Hacinco holds a talk show with the attendance of the Vietnamese War Veterans and Heroic Vietnamese Mother to provide staffs and students a chance to listen to the historic stories of the country. 10 1.4. Problem statement This paper is conduct to find the answer the following question regarding the CSR activities in Hacnico. _ What are the attitude and perception of Hacinco and related parties to Hacinco‟s CSR activities? _ What are the results and achievement of the Hacinco‟s CSR activities? 1.5. Objective of research This research is conducted to study the CSR concepts and its implementation. Furthermore, this is done to help interested parties have a good view on CSR activities in Vietnam and CSR in Hacinco. Being aware of CSR and its implementation, directors can enhance the business and management operations, improve their competitiveness in the marketplace, and thus contribute to the success of the company. 1.6. Sphere of research This research was conducted at Hanoi Construction and Investment Company, Hanoi, Vietnam. And the duration of the research was from 15 July 2010 to 28 September 2010. 1.7. Research methods Quantitative research was used to gather information on numerical data and reports, survey and questionnaires was given to related group of people to obtain information on CSR activities. Other methods will be used are research questions, data collection, data analysis, population and sampling and variables. 11 1.8. Structure of the research Chapter 1: Introduction This chapter presents the preview of the problem of research, some concepts, nature and purpose of research. Chapter 2: Conceptual frameworks This part gives a review of the theoretical framework and defined specific terms. Chapter 3: Research Methodology Chapter 3 includes the research methods, data collection. Chapter 4: Result analysis Base on the data and information collected, result will be drawn in this part. Chapter 5: Conclusions and recommendations This chapter gives the conclusions derived from the research. In addition, it discusses some recommendations and limitations of the research. 12 2. LITERATURE REVIEW 2.1. The evolution of the CSR concepts What is CSR all about? Originally, the world witnessed the emergence of the modern definition of CSR in the 1950s when Howard R. Bowen published the “Social Responsibility of Businessmen” and in which he is the first man used the phrase “corporate social responsibility” in 1953. In his book, Howard defined CSR as “It refers to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society”. The 1960s saw the wide use of the phrase “corporate social responsibility”. In 1963, Joseph W McGuire nearly get close to the recent understanding of CSR as he stated in his book, “Business and Society”: “The idea of social responsibilities supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society which extend beyond these obligations”. Through the 1970s and 1980s, the construction of the concepts has grown impressively as there are more definitions, and alternative themes like Social corporate performance, stakeholder theory and business ethics theory started to mature. In 1971, the Committee for Economic Development became the first men presented the model of CSR in its publication, the Social Responsibilities of Business Corporations. The model consists of three circles, the inner circle presents the core aim of making profit of organization, the intermediate circle presents the responsibilities the organizations must take in case of there is a 13 conflict between its economic interests and the social interests; the outer circle presents the responsibilities that the organizations must pursue to improve the environment, the social living standards and other issues. In addition, in 1989, the first social report of the world was published by an ice-cream company, Ben & Jerry‟s. From the 1980s up to now, the definitional construct for CSR has still been developing with many other concepts. For example, “A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” The European Commission “Corporations have a social responsibility and moral duty to use the power of markets to make globalization a positive force for all.” United Nations “Companies are realizing that it is in their business interest to „do the right thing‟ everywhere they operate. Global firms are keenly aware that their longterm investment goals can only be achieved within a stable, healthy and free of social and financial environment. But companies alone cannot solve the challenges associated with social responsibility. They must work in cooperation with governments, civil society groups, development institutions, and citizens.” World Bank However, there is no single concept can widely be used and commonly accepted. In general, Corporate Social Responsibility (CSR) is about how the organizations manage their operation process in order to meet the original operating objective as well as to act ethically and contribute the welfare to the 14 whole social community. There is no exception among the organizations in doing the CSR: not only the non-profit organizations and the non-government organization conducting the charity works but also the business entities doing their business while still behave ethically to the environment. It seems to be a tough job for the business entities as they are still moving forward to meet the economic figures target whilst managing and redirecting their behaviors on how to fit the ethical standards and improving the life quality of employees and their families, and the local community. 2.2. CSR elements 1. Responsibilities to the marketplaces and the consumers When a company doing business, it introduces its goods and services to the marketplaces and delivers them to the consumers. Consumers normally see the companies how good they are by consider their quality of goods and services. In one hand, if the goods and services satisfy with the consumer‟s requirement, they would also satisfy with the company, get used to the company image and support them by choosing their products when they have options while doing shopping. On the other hand, if the consumers dissatisfy with the goods and services they buy, they would set a defensive thought against them and view the company in a bad image, some of them stop to buy the company‟s goods and products, some of them go to tell the others about the bad things they suffer and convince them not to support the company any more. So, in order not to loose the consumers, the company should take responsibilities to the goods and products they offer by 15 setting a high standard for the manufacturing process and taking good care on the consumers by providing good after-purchasing services. 2. Responsibilities to the environment Many companies and firms in the world and also in Vietnam normally just focus on profit maximization and set the cost at low level. One of the costs that burden the company is the environmental costs. Environmental costs include cost of processing the waste and emission, cost of recovery the state of the polluted environment. In order to maximize the profit, some companies cut down the costs for waste processing process. They believe that the waste and emission come from their manufactures are too small and not much enough to damage or cause pollution to the environment so they ignore the processing process. Some others think that the responsibilities to the environment belong to the local agencies and the government and they want the government to take the environmental costs. However, according to recent scandal in some specific places in the world, some companies that do not have waste processing process or spend less money for this part finally have to burden the cost of recovery the state of the polluted environment. This not only costs the company much more than the first cost but also cause a bad image of the company. For instance, in Vietnam, many consumers reject to buy the Vedan products as they are aware that the Vedan company has cause pollution to the Thi Vai river and still do not want to compensate for what they have done. 3. Responsibilities to the employees 16 Employees could also be the company‟s consumer so firstly they should be treated as consumers like having rights to use good quality products and services and accessing to the after-purchasing services. Employees are able to be viewed as the ambassadors to the company. They are the best people to have a good understanding about the company‟s culture, the company‟s vision, the company‟s orientation, the company‟s goods and services and the company‟s behaviors to the customers. So in order to be well-advertised by these ambassadors, the company act to be a good business entity, and then they should have a good treatment policies to their staffs. 4. Responsibilities to the social community It is not only the staffs for which the company builds good treatment policies, the company should also spend some of their profits to help social community by charity works, poor or disable foundation . This is not only for public relation campaign but also for the culture of the company that they should be. As the company takes good care of the social community, the company would gain trust from them, and people would view the company as a good image. Some of them could be potential customers or client of the company in the future. In addition, as the company carries out the social charity works, these would build a good spirit among the staffs in the company and create a good corporate culture, then every employee feel happy with the company, feel pleased with what the company does and then they would devote their best effort to their jobs, contribute more and more to the success of the company. 2.3 Benefits of CSR 17 There is a Chinese proverb says that: “Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.” In short-term period, benefits that CSR can bring to us are the contracts and purchase orders from the companies that require CSR standards. However, the cost of applying CSR will be able to affect the business operation result of the company. Leaders who have ability of foreseeing the future will set the goals of operation that not simply limited by profits. Their success standards start from the impacts that they create for the social demands. These businessmen are seeking for solutions to change the society into a better way and vice versa, their business entities are likely to have better conditions for more sustainable development. The main long-term period benefits of CSR for the internal business entities are improving working relationship at workplace, reducing the working accidents, decreasing the turnover rate, increasing the labor productivity. In addition, CSR also help enhancing the prestige of the business in relationship with the clients and partners, creating competitive advantages in calling for investment, especially the foreign investment. How to manage a business entity that has responsibilities to the society? In order to be success, the term social responsibilities must be built from the base of the business goals It‟s much more easier to establish the culture of social responsibilities from the beginning rather than to change the company culture in the future The success SCR program should base on the establishment of trusts and supports from the customers and social community, the staffs, the providers and distributors, the investors and banks, and finally the government agencies. 18 CSR should be initially from the leaders. If the managers do not believe in the importance of the CSR, if they do not take part in or support the CSR activities, if they do not behave well at works as well as at their personal life, CSR will not work. CSR need to be applied in every activity of the companies and all the related parties. Business entities need to have good understanding about the CSR. However, the company can not exist if it bases only on CSR. For a longterm development, the company should make profits. Profits and CSR can be together and even in long term period, managing the business entities to have responsibilities to the society normally lead to sustainable development and higher profits. The business entity should have a good understanding about CSR: CSR is not a marketing trick to advertise for the business‟s images CSR is not simply a charity work CSR is not able to replace good-quality products and services of the business entities CSR is not able to replace the profits Some people are afraid that there are more difficulties as applying CSR in small and medium-sized businesses rather than large businesses since the resources of small and medium-sized are too scare and can not meet the demands of expensive CSR programs. That point of view is not definitely right; a small and newly established business is not able to be successful and sustainably developed if it do not practice the social responsibilities activities at the beginning. 19 In addition, CSR practices are not always and necessarily expensive. CSR is important as the process of implementing it but not the certificate paper. It is not meaningful if the business just cares about the paper but not the real practicing process. Business entities would be able to be successful in practicing CSR if there is guarantee and support from the board of managers, and have a good understanding about the importance and benefits of CSR in the long-term period and CSR would be part of the organizational culture. Some barriers and opportunities when doing CSR in Vietnamese organizations According to World Bank research on implementing CSR in textile and garment industry in Vietnam in 2002, there are some barriers and disadvantages: There are major differences in the perception and understanding of CSR within and between enterprises in Vietnam. A company apply a multiple set of rules of behavior are not effective Lack of financial resources and technical capacity to implement CSR standards, especially for small and medium-sized enterprises The difference between the Labor Code and the Code of Conduct for customer orders cause confusion for businesses, for example, in the matter of overtime hours or union activities. Lack of transparency in the application of CSR in fact hampering potential market benefits for the enterprises Inconsistency in the regulations of the State makes the application of the code of conduct does not have desire effects, such as salary, benefits and conditions of employment. 20